Schlagwort-Archive: Network

The dimensions of the digital transformation

The search for digital transformation affects many areas of the business. In the context of  the delivery of goods and services as well as in the generation of  revenue and income, traditional notions of the business world dissolve – the size no longer determines the range; Knowledge is not only available to the financially strong ones; Collaboration does not  need the common roof of a company. The society and the politics no longer provide the sense of belonging and social security to citizens – opinions are controlled with new resources, the new normal is the loud otherness; ethical principles are reinforced by the own filter bubble. A look at the dimensions of digital transformation shows that we are already in the middle of change.

The following dimensions require rethinking in business as well as in politics – now. Digital transformation will be possible, as soon as obsolete conditions are abandoned – e.g. Preference of long-term frame contracts, high entry barriers for small businesses by purchasing departments, lack of access to financial means and bureaucratic overload through institutional requirements.

  • Scaling for all
    The use of economies of scale was previously reserved for large companies. In order to keep the price for the means of production low, large quantities had to be accepted. Digital components cost almost nothing. This will make even small businesses competitive. Now these new entrepreneurs still have to be freed from the bureaucratic burden of the old economy. Purchasing departments and HR departments need new terms and conditions for these micro-business partners.
  • Limitless cooperation
    The services are complex today, since they are composed of many building blocks. The differences in local or national circumstances that have to be taken into account are made possible by modules and interfaces that fit together because they are standardized. The mandatory cooperation and the distribution of income need new business models.
  • Increasing acceleration
    The virtual proximity of all those involved, who are only one click away, leads to a staggering speed. Established approaches and formal decision-making can no longer compete. This gives unbureaucratic, agile companies a head start. It can only be achieved, if the legal and internal framework conditions are correspondingly debureaucratized.
  • „Soft“ capital
    Since physical assets no longer count in digital markets, „soft“ capital comes to the fore – data, knowledge, software, relationships. The critical key players are the computers, networks and above all the employees, who can be located anywhere in the world. This requires the replacement of a rigid corporate concept with networks that are able to quickly come together and to dissolve again.
  • Homeless values
    The values of a company are situated in the cyber-wonderland. There are no national boundaries or affiliations. Since national laws and regulations lose their effectiveness, we need in the medium term supranational legislatures and tax authorities to take over these tasks. In the meantime, the values are moving back and forth in the twilight zone. Assets are no longer determined by an objective financial value, but by the ability to create something new.
  • Network for everyone
    The minimal effort that is needed to set up a network enables everyone to open their own bubble of information. Over time, there will be powerful creative clouds due to the participants and their networking. This wisdom of the crowd, which is available for free, means the end of many, expensive research sites.
  • Multi-sided business models
    Due to the diverse market, it is increasingly difficult to find the right partner. For this reason, business models will evolve that specialize in the mediation between producers, their suppliers and customers. Proven, close cooperation’s will dissolve in favor of spontaneous, time-limited projects that are needs-oriented. The mediator role can be exercised by all those, who can bring together the relevant partners and will be able to earn a living from it.
  • Site loss
    The classic location and headquarters will disappear. The company headquarters will be located where the founder is currently living without being officially registered, because the business takes place in cyberspace (see above). Accordingly, there will no longer be the workforce with their representatives and regulated employment relationships. Legislation, state power and jurisdiction need to be adapted to international challenges in order to prevent location nomads, who are constantly on the run from responsibility and other duties.

The point in time, when the digital transformation is over, depends on how quickly and skillfully large companies can respond to these new developments. At the same time, government agencies are challenged to create the appropriate framework conditions to support these new developments. It is not the question whether, but when the parties act. In the meantime, the pioneers of these developments will find their way in the Internet and implement their business models.

Bottom line: The digital transformation is happening for years. Like the frog in the Boiling Frog Syndrome, the world is heating up due to increasing digitalization and networking. The dimensions are the scaling for all, the limitless collaboration, the increasing acceleration, the „soft“ capital, the homeless values, the network for everyone, the multi-sided business models and the loss of the site. For the sectors of the economy and the society this requires an immediate rethinking, in order to get the control over the used free space, so far unregulated by enterprises. This applies to tax havens as well as to the providers of illegal businesses in the Darknet. The dimensions of digital transformation are the basis.

(More here: OECD Digital Economy Outlook 2017)

What really comprises digitization

Is digitizing old wine in new hoses, or is there more behind it? After IT managers have been trying to be better integrated into the business for years, they continue only to be the supporters of the departments. Meanwhile, all areas are steeped in information technology. No process is free of IT support. Even if users still think that they can do everything by themselves with office tools such as MS Excel, MS Access, MS Word and MS PowerPoint, they have to face the fact that professional data management, analysis and workflow systems form the basis for their competitive advantage. And again, an attempt is made to convince the business through the marketing of an appropriate slogan – i.e. digitization.

Not only the IT departments, but also the hosts of IT consultants are interested in the acceptance. Let’s take a closer look at the aspects which drive nowadays digitization.

  • Nothing works without network
    Digitalization lives on constant broadband access to the Internet. More or less half of humanity is on the net. In Germany, network availability is about 98% in the city, but only 36% in the countryside. As long as the society does not care about a balanced availability, the areas, which have no net, are excluded from any participation of the new possibilities. The network is the basis that enables digitization today.
  • Ubiquitous data
    The business processes generate data that describes more and more details in the course of value creation. According to IDC, the data volume is expected to increase to 40 zettabytes by 2020 (40,000,000,000,000,000,000,000 bytes). The data carries the digital content of the business. The handling of this flood of data will be the decisive competence of the future for users.
  • Barrier-free programs
    IT applications are located in the cloud in a digitized world. Access is available across all types of devices: mainframes, PC’s, notebooks, laptops, tablets, smartphones, PDA’s, RFID readers. 90% of German households have a computer (two-thirds use Outlook as an e-mail program). New models of collaboration will be possible, when access barriers, such as network availability, data protection and the use of the wide range of end devices, are simplified so that the programs receive, process and provide the necessary data in every imaginable environment.
  • Standardized procedure
    In order to be able to connect the processes spontaneously, they need agreements that ensure that the contact can be quickly established and resolved. Access is cable-based and wireless via WLAN or LTE/4G. As soon as this becomes possible outside the high-security wings of the companies, the operation of the business becomes independent from the traditional offices.
  • Digital culture
    In the digital world, businesses take place at unusual speeds and durations. For this purpose, also the employees must be able to quickly change from one idea to another. On the one hand, they must be ready to try new things spontaneously, to evaluate the results, but also to quickly let go unfavorable solutions. In order to be agile, work and responsibility have to be reorganized. A digital culture is closely related to a learning organization. This becomes apparent, when no negative consequences arise for the actors in the case of failure.

Bottom line: Digitization is a new attempt of penetrating the working world with information technology. Nothing really new happens. Long-known technologies are now so powerful that they can finally fulfill the promises of the last 20 years. The elements are now seamlessly interlinked – as long as the right basic conditions have been created. The net is as important to it as breathing in the air to people. The data are the blood cells that carry the oxygen to the place, where it is needed. The programs form the organs that process the oxygen for the survival of the whole organism. For this purpose, over time procedures have been developed to ensure operations. If the organism then also has an attitude that allows all participants lifelong learning, nothing impedes a digital culture. The above points show the essential requirements that really comprise digitization.